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A Company That's Bringing Manufacturing Back To Detroit — On 2 Wheels

At the 50,000-square-foot Detroit Bikes factory on the city’s west side, steel parts come through the door and, after machining, fabrication, painting and assembly, leave as a complete bike.

That makes the company unique within the $6-billion-per-year American bike industry, said Detroit Bikes President Zak Pashak, who moved from Canada to Detroit and started the business in 2011 with a $2 million investment.

“We’re on the forefront of onshoring the industry,” said Pashak, 36. “It’s a story of a changing city. We’re changing what we’re producing here. It’s about urban revival through urban revival.”

Pashak ascribes the growing appeal of biking to several factors: the health benefits of biking; the cost of owning, maintaining and refueling a car; and the fact that an upfront investment of less than $1,000 can provide transportation that lasts for years.

‘It’s A City Of People Who Like To Make Stuff’

Detroit Bikes made 8,000 of its commuter bikes in 2016. The facility has the capacity to make 50,000 to 100,000 of them annually, Pashak said.

In many cases, the company’s employees learned their skills while working in the auto industry. Hiring employees in Detroit has a twofold advantage, Pashak said: the talent pool is deep, and the new jobs are needed in a region that’s struggled with high unemployment.

“At its core, it’s a city of people who like to make stuff,” Pashak said. “This company wouldn’t exist without the auto industry, and I don’t think that’s a bad thing.”

On a recent weekday afternoon, a machinist was busy working on a rear fender support, while welders fabricated bicycle frames inside red booths.

In the company’s assembly area, employees were putting the finishing touches on New Belgium Brewery Bikes, adding decals and attaching the final parts.

Detroit Bikes has a powder coat paint booth — a difficult-to-master process that allows for a wider range of custom work, Pashak said.

The company can fulfill orders from as small as 10 bikes to those in the thousands.

Detroit Bikes is working on an order for 2,000 custom New Belgium Brewery bikes now, and then it will begin filling an assembly contract for the Canadian electronic bicycle company Vanhawks.

“For New Belgium, it was really important that they had a U.S.-made frame, and we’re the only company that could do it,” Pashak said.

Other custom jobs were visible during a tour of the Detroit Bikes factory. A Slow Roll Detroit special edition is available, and Detroit Bikes donates $100 to the nonprofit for each bike that’s sold, Pashak said.

An all-black bike model sitting nearby is being developed for police use with input from the Michigan State Police on its design and functionality. The model, which is scheduled to go into production this summer, is called “The 1917” — the year the police agency was was founded.

Kenneth Hayes, 27, does final assembly Wednesday on a bicycle at the Detroit Bikes manufacturing facility on the city’s west side. Photo by Dustin Blitchok.

A Motor City Business Advantage

An 11-percent tariff the United States slaps on bikes assembled in China represents a growth opportunity for Detroit Bikes, Pashak said, and has led to the company pitching large-scale bike manufacturers for assembly contracts.

The savings on the cost of the tariff — and the lower expense of shipping parts, rather than a completed bike, to the United States — means it makes business sense for companies to have bikes assembled in Detroit, Pashak said.

Detroit Bikes has about 30 employees, but that number could reach into the thousands if just 10 percent of the 19 million–20 million bicycles sold in the United States each year were manufactured or assembled in the Motor City, Pashak said.

Detroit Bikes are sold worldwide, and the company recently signed a sales agreement with American Cycle & Fitness, one of the top 10 bike retailers in the country, Pashak said.

While Detroit Bike’s handcrafted process would seem to click with independent retailers, Pashak said it’s a hard market to break into — and the $699 commuter bike models might carry more appeal with national chains.

“We’re trying to sell people a very basic, very simple commuter bike.”

The company opened a retail location on the ground floor of The Albert, a luxury apartment building in downtown Detroit, in 2015. Pashak compares it to an Apple Inc. (NASDAQ: AAPL) store — a flagship location, a public face for the brand and a place where customers can have bikes serviced.

Pashak’s company is still finding its financial footing, he said, but he has faith in his decision to move to the Motor City.

“I wouldn’t change it for anything,” he said. “I love the city. I’m proud of the bikes we’re making and how far we’ve come.”

Main Image Credit: Detroit Bikes President Zak Pashak, 36, at the company's manufacturing facility, where employees are completing a 2,000-bike order from New Belgium Brewing. Photo by Dustin Blitchok.